- The Washington Times - Friday, February 13, 2009

LAHORE, Pakistan

Maisooma Khan walks into one of Lahore’s finest restaurants with authority. Her blow-dried hair hangs smooth and long on her back while her black top shows off her flat midriff.

She expertly sprinkles smiles, pleasantries and “Oh, it’s been so long since I last saw you” on the women gathered around her, smoothly weaving her way through the crowd.

As Ms. Khan, 36, moves around, women take out white envelopes with money inside and press them into her hand. She smiles in return, jots down their names in a sequined diary and moves on.

This isn’t their way of going Dutch; rather it’s their contribution to a savings society, known in Pakistan as a “committee.”

“If there are 20 women in the committee, then it means the committee will go on for 20 months,” she said. “Nobody is allowed to leave in the middle of a committee.”

At each meeting, one woman is chosen to get the full payout early, in effect to receive a loan with no interest. The winners continue to make monthly payments but are excluded from future drawings.

“The committee culture in Pakistan is extremely popular,” Ms. Khan said, as she talked between phone calls from women asking where they should drop off their contributions. “It’s an excellent way for women to obtain interest-free loans and save up for big purchases.”

Ms. Khan has been organizing committees for the past eight years. Individual contributions generally range from $15 to as much as $2,000. If a committee lasts 10 months and has 10 women, the payouts would range from $150 to $20,000.

In some committees, payouts can reach $200,000.

Saba Hameed, 32, a mother of two, is a regular member of Ms. Khan’s committees. She says the attraction for her is that the little she manages to save from the pocket money her husband gives her adds up to a sizable amount.

“I end up planning in advance,” she said. When she wins the payout, “I either get a piece of jewelry made for myself or I plan a shopping spree to Dubai.”

Tamkeen Nawaz, 28, joined committees because for her it was almost like getting an interest-free loan without putting up any collateral.

“I tend to invest the money I get from a committee into property etc.,” she said. “If I was to go to a bank to take a loan, the interest would drain me out.”

No one exactly knows how and when the committee culture began in Pakistan, but veterans of the phenomenon say it has been around for decades.

The committee also serves another important purpose for women by providing them with an opportunity to taste financial independence.

Dr. Shehla Javed, president-elect of Pakistan’s Women Chamber of Commerce and Industry (PWCC), says the committee provides many female entrepreneurs with the capital needed to launch themselves.

“Often women want to start boutiques or beauty salons, and their husbands are hesitant to give them the money for these ventures,” she said. “In such circumstances, a committee helps them out.”

Many of PWCC’s members have invested in committees with the intention of expanding their businesses or beginning a startup.

Karachi-based economist Shahida Wazarat said rising interest rates have also prompted an increase in the popularity of the committee culture.

“Banks are loaning at interest rates as high as 20 percent, and there is a dearth of credit in the market,” she said. “After the economic crunch, banks are hesitant to loan out money to individuals and small businesses.”

In such circumstances, Ms. Wazarat said the committee provides an ideal option - the equivalent of an interest-free loan with reasonable monthly installments. Plus, there’s no penalty for late payments.

“We don’t deduct money or anything if someone is late with their committees,” Ms. Khan said. “I wish we did. I’d just drive the latecomers insane by harassing them with phone calls.”

A nonfinancial advantage to the committee culture is that it provides women with a reason to step outside their homes to socialize.

“Most women in Pakistan are so entertainment-starved that the opportunity of getting dressed and leaving their houses once a month is a big deal for them,” said Lahore-based psychiatrist Dr. Zahid Mehmood. “It’s one of the biggest advantages of this culture. As it is, in Pakistan there aren’t many places women can go to.”

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